Question
The annual data that follows pertain to Rays, a manufacturer of swimming goggles (the company had no beginning inventory) Sales Price $47 Variable Manufacturing expense
The annual data that follows pertain to Rays, a manufacturer of swimming goggles (the company had no beginning inventory)
Sales Price $47
Variable Manufacturing expense per unit $20
Sales Commission expense per unit $9
Fixed manufacturing overhead $2,990,000
Fixed operating expenses $230,000
Number of goggles produced 230,000
Number of goggles sold 218,000
Requirements
1. | Prepare both conventional (absorption costing) and contribution margin (variable costing) income statements for Rays for the year. |
2. | Which statement shows the higher operating income? Why? |
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